March Madness?: Basketball, Bookies, Point Shaving, and Forensic Economics

David Leonhardt, a New York Times columnist who writes about economics and quantitative approaches to analyzing sports, wrote a piece this Wednesday (Mar. 8) on Justin Wolfers' forensic economics research that strongly suggests that players on college basketball teams that are heavy favorites (according to the odds indicated by the point spreads in Las Vegas sports books) may be engaging in a form of cheating called 'point shaving.' (The article: Sad Suspicions About Scores in Basketball.)

Justin Wolfers is an economist at the Wharton School, University of Pennsylvania. His homepage is at http://bpp.wharton.upenn.edu/jwolfers/index.shtml . You can download his research directly at http://bpp.wharton.upenn.edu/jwolfers/Papers/PointShaving.pdf .

This type of forensic economics and forensic finance is incredibly interesting. It's already been popularized by Levitt and Dubner's Freakonomics, and the less well known book by Prof. Ray Fair (of Yale), Predicting Presidential Elections and Other Things (the title of the book doesn't do it justice; the book is really more about applications of econometrics to creative and interesting areas like the price of vintage wine as well as predicting presidential elections).

By the way, I crossed paths very briefly with Justin Wolfers when he was a graduate student at Harvard (he probably wouldn't remember me though). He seemed like a nice guy. It's worth noting that he had the pony tail back then too!